⛩️ #46 A Psychic Gambled $40bn & Almost Broke Japan's Economy (Pt 1)
(Briefly) one of the richest people in the world
Osaka restaurant owner Nui Onoué. In the year 1989, she was lent ¥1.9 trillion by Japanese banks (approximately $33.24 billion USD at today’s prices). Image: Daily Shinchō
The Secret Ceremony
It was a Sunday night when the financiers gathered outside a nondescript Osaka restaurant.
A dozen of them, all male, middle-aged. Spectacles gleamed under the streetlights, along with bald spots that could not be combed into submission.
At first glance, they might have been mistaken for a wedge of wedding guests. They carried luxurious brand-name gift bags — the kind of ostentatious tokens expected (and expensed) in Japan’s corporate entertainment world.
These were men of standing: prominent figures from banks, investment firms, and lending societies. Men who had used a combination of intelligence and vegetable patience to scale the corporate ladder to seats of power and influence.
And tonight was a very important night.
The deployment of hundreds of billions of yen — billions of U.S. dollars — hung in the balance. Money would slosh outwards from this unassuming restaurant to all corners of the Japanese economy, from its largest banks to its smallest savings-and-loan associations.
The restaurant’s proprietor slid open the door. She was 60, clad in a flawless kimono, the epitome of the fragrant host. Not a hair out of place. Poised. Cringingly polite.
With a spry irasshaimase!, she welcomed her guests inside, tailoring her greetings to the rigid hierarchies of corporate Japan so each man was treated exactly as his position dictated.
Then the visitors were passed off to a maid, who directed them to remove their shoes and follow her into the inner sanctum. She led them through an unmarked door and down an unlit hallway, deeper and deeper into the building.
The maid stopped. Dropping to her knees, she slid open a door halfway, then switched hands to open it fully. Rising fluidly back to her feet, she bid the men enter.
The room was small, floored with tatami.
The men filed in, excitement growing. Those with an eye for aesthetics noticed the exceptionally expensive wall scroll hanging in the alcove.
The far wall consisted of a series of sliding glass doors, overlooking a garden, invisible now due to the glare of the room-lights off the glass.
The maid subtly directed them to positions reflecting their corporate stature: the big cheeses at the front with the best view of the garden, while the up-and-comers — Japan’s next generation of corporate samurai — were kept toward the back, though hoping to slowly migrate forward in the following months and years.
The maid departed.
The dozen men, who nearly filled the room, settled into seiza, the formal Japanese kneeling posture.
Silence.
Minutes later, the door slid open again.
Most of the men kept their eyes forward, ignoring the sound. A few — first-timers to the gyō ceremony — couldn’t resist glancing over their shoulders. What they saw the was the maid, prostrate in the hallway, awaiting:
The proprietor.
The same woman who had greeted the guests earlier, entered, now wearing white Buddhist robes over her kimono.
The veterans of the gyō smiled knowingly. The ceremony was about to begin.
The proprietor glided to the glass doors overlooking the garden and paused there.
Swish, swish — the maid approached over the tatami and slid the creaking garden doors open. The reflection of the room in the glass was replaced by a moon-splintered view of the garden.
To Western eyes, it might have been deemed “Zen,” but to the practiced gaze, it was a hodgepodge: part Buddhist, part Shinto, part kitsch.
The proprietor stood motionless, staring into the garden, her back to the men.
Slowly, without turning, she extended her right hand.
The room’s most senior figure — vice president of a prominent industrial bank — rose and approached her, taking from his pocket a small folded piece of white paper.
He placed it in her hand, and retreated to his place.
The proprietor slowly, deliberately unfolded the paper, and read a single word that had been handwritten there, then tucked the paper into the bosom of her kimono.
All of this transpired in silence.
Now: the proprietor closed her eyes and clasped her hands together, index fingers pointing upwards, thumbs crossed.
And she began to shake, rocking back and forth, and mouth words to herself, as if she were a teacher wagging her fingers at an invisible student.
The men stared, as from their point of view, it seemed like the proprietor was bowing rapidly to an invisible God…
And she was, but that God was not invisible.
It sat in the garden. It was a stone statue of a frog.
And after a full minute of this bizarre prayer, the proprietor’s eyes snapped open and she stared at the frog. The frog, for its part, stared back.
Then revelation swept across her face, and here is what she said:
“It’s going to go up!”
The man who had handed her the note was ecstatic, and turned to the room full of his fellow financiers and vouchsafed the information to them: “That’s it! Mitsubishi shares are going to rise!”
That was the single word he had written on the paper: Mitsubishi.
The gyō was over.
The men stayed for dinner, secure in the knowledge that the markets wouldn’t open until the next morning, giving them plenty of time to call in their buy orders.
As for the restaurant’s proprietor, she spent the night entertaining her guests, pouring them drinks and engaging them in conversation with her usual wit and tact.
Her name was Nui Onoué, and for a brief moment, she was one of the richest people in the world.
This is Part 1 of a two part story on Nui Onoué and the $40bn she gambled and lost.
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Who the hell is Nui Onoué?
Born near the beginning of the Shōwa Era, on February 22, 1930, in Nara Prefecture, Nui Onoué was the second daughter of an unremarkable farming family. After graduating from high school during World War II, she quickly married, had a daughter, then divorced. By age 25, she had taken a job as a waitress at a sukiyaki restaurant in the heart of Minami, Osaka’s most famous entertainment zone.
Like similar districts across Japan, Minami has always thrived on a subtle dance between the sexes: men with money (or pretending to have it) flashing their wealth to impress women — who, though feigning indifference, are on the lookout for a patron or mentor (preferably not a lover) who can grant them financial independence.
Neither party, of course, openly acknowledges this dynamic, which is, at its core, a transaction designed to swap money for companionship.
Women who navigate this world effectively — paying close attention to social dynamics and the male ego while staying patient — and avoiding addiction or drama with rivals — often rose to become extraordinarily wealthy, and become “mama-sans”, the formidable proprietors of establishments in these entertainment districts.
Nui Onoué was one such women. For a decade, she worked tirelessly at the sukiyaki restaurant, gradually cultivating relationships with influential figures in the business world until these patrons eventually began to open the spigot of money that would rise her in the world.
By 1965 she had purchased her first building, a former ryokan (traditional Japanese inn), in order to transform it into a restaurant named Keisen. Her patron — or patrons — provided 100% of the capital.
Patiently, and with scrupulous attention to flattering her backers, Onoué expanded her operations. She acquired extraordinarily expensive land nearby, and built a snack bar and mahjong parlor, while converting her original building into a high-class Japanese restaurant called Daikokuya.
However, there were early signs that Onoué’s talents lay more in customer relations than financial management: Daikokuya was a perpetually money-losing operation. No matter; by this time, Onoué had a substantial personal cash windfall, reportedly left to her in the will of one of her wealthy patrons.
The Loans Begin
The intricate dance of Japan’s entertainment world continued at Daikokuya. One regular customer was a branch manager of the Industrial Bank of Japan (IBJ), one of the country’s leading banks, known for providing long-term financing to heavy industries and infrastructure projects.
Over the course of many visits, pleasantries between proprietress and the manager turned to business. Onoué, who had only a basic knowledge of IBJ and its critical role in the Japanese economy, was persuaded — as a favor — to purchase ¥1 billion worth of warikō discount financial bonds.
Warikō were short-term debt instruments issued by Japanese banks, sold at a discount to face value. A bond might be purchased for ¥95,000, with a maturity payout of ¥100,000 — the difference serving as the interest.
These bonds were safe, convenient investments with predictable returns and tax advantages. It was a win-win arrangement for both Onoué and the branch manager, who successfully brought in a major new client for the bank.
The ¥1 billion warikō purchase, Onoué’s very first step into financial investing, took place on March 13, 1987.
Within four years, while still running Daikokuya full-time, Onoué would borrow a total of $33bn, rise to become one of the richest people in the world, before going bankrupt with personal debts of $5bn.
It was the most spectacular and rapid financial rise and fall in the history of the world.
Join us next week for the concluding part of this story.
Nui Onoué, after the fall. Image: Daily Shinchō
Until next time,
The Kyote
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